Bay sections are shrinking as land values soar, new figures show.
Section prices in Tauranga have risen 140 per cent since 2000 and houses are being built on smaller sites, but developers say prospective buyers are willing to sacrifice section sizes to get on the property ladder.
Figures from the Tauranga City Council show that, in 2000 the average size 677sqm section had a sale price of $77,518 with 361 sold that year.
In 2014, the average size of a section was 584sqm and had a sale price of $186,350, with 581 sold to date.
Thorne Group owner Bob Thorne said there had been a paradigm shift in people willing to downsize on their section size but location and house design remained crucial.
Its 200 sections at Urban Ridge on the boundary of "Bethlehem triangle" ranged from 250sqm to 400sqm and particularly appealed to older people or young professional couples who did not want lawns to mow.
"We are finding about 40 per cent of our sales are for two-bedroom homes with garages."
Land was also expensive in Tauranga, Mr Thorne said.
"To get one hectare of land where we are, you are looking at close to $1.5 million with development costs of approximately $70,000 per section."
CBC Construction director Peter Cooney said people had accepted they did not need a quarter-acre section.
"They are more than happy to have the modern conveniences in a home that is on a slightly smaller section."
However, expectations on the fitout were higher.
He agreed land was too expensive in Tauranga due to the average wage and population size.
Classic Builders regional manager Paul Taylor said his company's building activity was up 20 per cent in Tauranga and 40 per cent in the Western Bay.
An entry-level new home for about $429,000 would buy three bedrooms, a bathroom and ensuite with double garage.
Bluehaven Management Papamoa East chief executive Bill Miller said the Tauranga City Council was working towards a mandate to put 15 sites per hectare to cope with Smart Growth's prediction that the population would double over the next 40 years.
"Most developers that have land in the area have agreed to work towards this requirement."
There was a huge amount of green space, parks, reserves and the beach, particularly in Papamoa, so people would compromise that over a big section needing ongoing maintenance.
Tauranga City Council strategic planner Andrew Mead said there was a target in the Regional Policy Statement of 15 dwellings per hectare for residential development that roughly equated to an average section size of 500sqm.
The City Plan allowed sections as small as 325sqm without a significant resource consent process.
Downsized lifestyle is big winner
Tauranga retirees Jill and Bob Kemp have downsized their section and are living a maintenance-free dream.
The sprightly couple, aged 70 and 71, are residents at Urban Ridge and recently traded 1060sqm for 340sqm in the new residential development. The move has given them more freedom, they say.
"It used to take Bob one and a half hours to mow the lawn," Mrs Kemp joked, "but now it takes six minutes."
Savings had also been made on other costs.
"A larger property is more expensive to run but this is brand new and maintenance-free because it is insulated and has all the green features like LED lighting," she said.
The most difficult transition was moving into the modern, contemporary home when they were used to a classic style.
"That was a bit hard to get our head around but now it's absolutely fantastic," Mrs Kemp said.
"I love the wonderful ease of living."
Their house has two bedrooms, an extra large garage, living areas designed to capture the sun, and no hallway.
Space had also been allocated for a small grassed area and compact vege patch.
Another element that appealed was the fact that if anything happened to either of them the other could afford to stay there on their pension.